(Immediate Release 26 May 2011)
The Charity Commission has been notified by the Higher Education Funding Council for England (HEFCE) of a number of frauds and attempted frauds involving faked documentation purporting to change suppliers’ bank account details. Higher education institutions across England have been targeted. A number of the frauds have involved construction companies, possibly as payments to such suppliers tend to be substantial. All cases have been investigated by the police.
This alert has been issued as part of an initiative by the Charity Commission to inform trustees and members of the public of scams or fraudulent activity carried out within the charitable sector.
Many charities, particularly those using suppliers of significant services, could be vulnerable to this type of fraud. The Commission is advising such charities to be alert to this fraud risk and to:
- ensure they have appropriate controls over proposed changes to supplier details, such as independently verifying with the supplier the change to supplier details before it is actioned, e.g. by speaking to the supplier’s credit control department (or equivalent) and/or writing to confirm the change of account details with the supplier
- scrutinise the documentation which purports to make these changes; e.g. check if the contact details, and the customer or contract numbers are correct
- ensure that making changes to supplier details cannot be carried out by one individual unchecked, particularly where large ongoing contracts are concerned; and that such changes are properly authorised by an individual at an appropriate and agreed level in the charity and the supplier
- review their existing controls
If a charity suspects or becomes aware of a fraud they should report this to Action Fraud, using their online fraud reporting tool, or by telephoning 0300 123 2040. Charities should also contact the Charity Commission.
Higher education institutions that are exempt charities should report suspected frauds to HEFCE as the principal regulator, not the Commission.
Sound financial controls and financial management are an essential defence for charities against fraud and financial crime. They should be a core part of a charity’s culture, and practised to the same degree of excellence as a charity’s activities.
Further guidance for trustees and other charity managers on tackling Fraud and financial crime can be found in the Commission’s online toolkit (Protecting charities from harm).
PR27/11
Notes to Editors
- The Charity Commission is the independent regulator of charities in England and Wales. See www.charitycommission.gov.uk for further information or call our contact centre on 0845 300 0218.
- Our mission is: to ensure charities’ legal compliance, enhance charities’ accountability, encourage charities’ effectiveness and impact and to promote the public interest in charity.
- HEFCE is the principal regulator of those higher education institutions that are exempt charities. For further information on HEFCE and charity regulation see http://www.hefce.ac.uk/finance/charities/